Case Study - Overwhelmed or Empathetic

Max is cautious around strangers, especially men. I have a new friend and Max is fairly comfortable with him in our yard, but Max gets nervous when he comes in my house still. I have a process I use to get Max comfortable with my friends in the house and he's progressing well. (For repair people etc, I just hold him.)
My friend, C, was sitting on the couch and talking about something emotionally difficult. Max worked his way into C's lap so C could/would pet him. Max still seemed nervous and was shedding (a stress sign) but curled into him more and more. Later, he went almost to sleep in my friend's lap.

Usually when I have guests over sitting on the couch, Max moves back and forth between getting attention from me and guests, gets too stressed and backs off in a short period of time, then comes back later.

I'm wondering how to interpret this and what, if anything I might do better in the future. Max seemed stressed, but was also able to remove himself from the situation, move over closer to me, go to his kennel, etc. Other than the shedding, he wasn't exhibiting any of his usual stress signs (licking his feet or scratching his neck.) I don't think he was shutdown, because as soon as we moved him, he was acting normally. But it is really important to me that I do keep Max under threshold or at minimum learn from it if I let things go too far.

If you have any input, please share it in the comments section.